Working group formed to examine fire retirement plan | Status
CHEYENNE – The dollars on the Wyoming Retirement System’s Fire A Pension Plan are being spent faster than they grow, with the account losing $ 42,000 a day. That said, the minute you read this paragraph, it just lost another $ 29.
Time is of the essence for the plan, which will benefit 266 retirees and their beneficiaries, including 25 Sheridan residents. If nothing changes, the fund will run out sometime in 2026.
This is the nightmare scenario for Tom Chapman, chairman of the board of the Wyoming Retirement Systems. There is no better time to look for a last-minute solution to ensure the long-term economic security of retirees, Chapman said.
“Fire A is only 1% of our total wealth, but it doesn’t matter because there is a person behind every pension,” said Chapman. âAll of our Fire A people are retired. You worked hard. We don’t want these people to be left on dry land … We think this could be one of our better opportunities for a solution because it will certainly be one of our last. “
During its June 15 meeting, the Wyoming Legislature Joint Funding Committee took the first step in finding solutions by forming a working group of lawmakers to work with the Wyoming Pension System on possible solutions.
The Wyoming Retirement System’s Fire A Pension Plan is a plan for paid firefighters who were hired prior to July 1, 1981. All of the following settings were placed in a Fire B Pension Plan, which has reduced benefits compared to the A-Plan. The A-Plan is currently 41% funded at $ 97.96 million.
In 1997 the plan was considered fully funded and the legislature put all employee and employer contributions into the plan. With the dollars invested in the stock market, the plan was expected to be self-sustaining.
However, the fund ran into trouble after the 2001 recession when the plan funded from 147% to 95% within one year. The account saw another significant decline after the 2008 recession when it funded from 106% to 84% from 2008 to 2009.
According to David Swindell, executive director of Wyoming Retirement System, an additional $ 140 million is required to be fully funded.
Solutions to the retirement problem could take several forms, according to former Attorney General Patrick Crank, who serves as legal advocate for many members of the Fire A Plan.
One involves developing a bill similar to House Bill 51, which Crank said passed the House of Representatives but died in the Senate in 2014. This bill envisaged a variety of funding measures, including increased state contributions; Funding from the six cities, two districts and one district airport, whose employees are covered by the A-Plan; and a reduction in benefits to retirees and their beneficiaries, who receive an average annual benefit of $ 60,764.
Crank said the goal of any legislation would be to split the cost of fully funding the pension between the various parties so that it is as painless as possible, if not cheap.
“If we can get a good deal there will be no real winners and no real losers,” said Robert Simmons, a Sheridan resident who is a Fire A retiree.
In preparation for possible legislative action, the city of Sheridan has allocated US $ 200,000 in its 2022 budget for contributions to the pension plan.
If the legislative process fails the beneficiaries, a lawsuit can save the fund, Crank said.
As a final effort, several beneficiaries have filed a declaratory action in Laramie District Court stating that there is only one Fire Retirement account in the state and that Fire A beneficiaries can be paid out of the Fire B Pension Plan if the Fire A Fund expires. If A and B were combined, the combined fund would also fail, but in 22 years instead of five, Crank said. This gives the legislature more time to find a workable solution for the state pensioners.
While Crank said he was hopeful about the lawsuit, he said that finding a workable legislative solution was the best way to move forward.
“I saw on your interim subject that someone was concerned that action might be taken that could affect the lawsuit,” said Crank. âBut I’d say that’s silly. Hope you do something that affects the lawsuit. If you have a plan … that solves the problem, we will dismiss the lawsuit … You face a serious problem for these people and it is your job to act. I know you can act and there are a lot of bright people here and I hope you act. “
According to Rep. Bob Nicholas, R-Cheyenne, the working group hopes to present possible legislative solutions to the Grants Committee in early fall.